New bipartisan bill to classify digital tokens as commodities. A new bipartisan-backed bill has a goal to clarify investment contract assets or digital tokens sold as part of a securities offering are separate and distinct commodities, not securities.
The legislation introduced by Chairman of the National Republican Congressional Committee Rep. Tom Emmer (R-Minn.) would amend existing securities laws to exclude tokens from the definition of a security.
Amy Davine Kim, Chief Policy Officer of the Chamber of Digital Commerce (CDC), noted that if a company issues a token and there is an investment agreement there, to qualify for an exemption, it must register with the Securities and Exchange Commission (SEC). The token that’s the object or the subject of that investment contract itself isn’t necessarily a security, Kim said.
According to a press statement on Emmer’s website, the bill would allow companies in compliance with securities registration requirements or have qualified for an exemption to “distribute their assets to the public without additional regulatory uncertainty.” It goes on to add that digital tokens associated with security offerings “are in fact, and always were, commodities.”
The bill has bipartisan support, Kim said, adding that the bill would make law a legal norm claim made in an amicus brief submitted by the CDC. This follows the SEC injunction against Telegram, in which when it released its native gram token in 2018, Telegram was accused of violating securities law.
The new legislation would help to bring clarity to this area of the industry that’s in desperate need of it, Kim said.
[image: Clifford Photography]
